IN THE market for a used car? Good luck finding a bargain: The price of “pre-owned’’ vehicles has climbed considerably over the past year. According to Edmunds.com, a website for car buyers, a three-year-old automobile today will set you back, on average, close to $20,000 — a spike of more than 10 percent since last summer. For some popular models, the increase has been much steeper. In July, a used Cadillac Escalade was going for around $35,000, or nearly 36 percent over last July’s price.

Why are used-car prices rocketing? Part of the answer is that demand is up: With unemployment high and the economy uncertain, some car buyers who might otherwise be looking for a new truck or SUV are instead shopping for a used vehicle as a way to save money.

But an even bigger part of the answer is that the supply of used cars is artificially low, because your Uncle Sam decided last year to destroy hundreds of thousands of perfectly good automobiles as part of its hare-brained Car Allowance Rebate System — or, as most of us called it, Cash for Clunkers. That was the program under which the government paid consumers up to $4,500 when they traded in an old car and bought a new one with better gas mileage. The traded-in cars — which had to be in drivable condition to qualify for the rebate — were then demolished: Dealers were required to chemically wreck each car’s engine, and send the car to be crushed or shredded.

Congress and the Obama administration trumpeted Cash for Clunkers as a triumph — the president pronounced it “successful beyond anybody’s imagination.’’ Which it was, if you define success as getting people to take “free’’ money to make a purchase most of them are going to make anyway, while simultaneously wiping out productive assets that could provide value to many other consumers for years to come. By any rational standard, however, this program was sheer folly.

No great insight was needed to realize that Cash for Clunkers would work a hardship on people unable to afford a new car. “All this program did for them,’’ I wrote last August, “was guarantee that used cars will become more expensive. Poorer drivers will be penalized to subsidize new cars for wealthier drivers.’’ Alec Gutierrez, a senior analyst for Kelley Blue Book, predicted that used-car prices would surge by up to 10 percent. “It’s going to drive prices up on some of the most affordable vehicles we have on the road,’’ he told USA Today. In short, Washington spent nearly $3 billion to raise the price of mobility for drivers on a budget.

To be sure, Cash for Clunkers gave a powerful jolt to car sales in July and August of 2009. But it did so mostly by delaying sales that would otherwise have occurred in April, May, and June, or by accelerating those that would have taken place in September, October, or later. “Influencing the timing of consumers’ durable purchases is easy,’’ Edmunds CEO Jeremy Anwyl wrote a few days ago in a blog post looking back at the program. “Creating new purchases is not.’’ Of the 700,000 cars purchased during the clunkers frenzy, the estimated net increase in sales was only 125,000. Each incremental sale thus ended up costing the taxpayers a profligate $24,000.

Even on environmental grounds, Cash for Clunkers was an exorbitant dud. Researchers at the University of California-Davis calculated that the reduction of carbon dioxide attributable to the program cost no less than $237 per ton. In contrast, carbon emissions credits cost about $20 per ton in international markets.

Using Department of Transportation figures, the Associated Press calculated that replacing inefficient clunkers with new cars getting higher mileage would reduce CO2 emissions by around 700,000 tons a year — less than Americans emit in a single hour. Likewise, the projected reduction in gasoline use amounted to about as much as Americans go through in 4 hours. (And that’s only if you assume — contrary to historical experience — that fuel consumption decreases when fuel efficiency rises.)

When all is said and done, Cash for Clunkers was a deplorable exercise in budgetary wastefulness, asset destruction, environmental irrelevance, and economic idiocy. Other than that, it was a screaming success.

I think the first reason is valid, the second is nonsense and here's why..

People are being smarter with their money. They are buying used instead of new more now than ever.

Those clunkers really were clunkers. People were NOT turning in 2006 LS400 Lexus' to get $4500 in trade in.. They were turning in pieces of crap that no one was buying anyway.

Having said that.. Cash for Clunkers was a stupid waste of my money

I'm driving my clunker, until it dies (then, I'm laying hands on it to resurrect it ).

My wife doesn't agree with me (actually, it's her old car that she bequeathed to me). But, hey, that's why I can afford to send my kids to private school. Both my vehicles were paid in full, until my old minivan got totaled. Now, I have a car note with the new one.

I'm driving my clunker, until it dies (then, I'm laying hands on it to resurrect it ).

My wife doesn't agree with me (actually, it's her old car that she bequeathed to me). But, hey, that's why I can afford to send my kids to private school. Both my vehicles were paid in full, until my old minivan got totaled. Now, I have a car note with the new one.

I drive an '03 Mach 1 Mustang that I paid off in '05. It has 125K miles on it and I will drive it until it gives up the ghost or I can pay cash for a newer used vehicle. The unintended consequence of this economic hardship is that a lot of people who have secure good paying jobs like myself, are being more frugal. I will admit that a few years ago I was living a little above my means due to easy credit and years of a flourishing economy and the mindset that foreclosure happened to other people, not anyone I knew. These days I find myself more aware of my spending, savings and retirement than ever before. I think it is from watching what happened to other people that's on the news daily that subconsciously affected me.

I drive an '03 Mach 1 Mustang that I paid off in '05. It has 125K miles on it and I will drive it until it gives up the ghost or I can pay cash for a newer used vehicle. The unintended consequence of this economic hardship is that a lot of people who have secure good paying jobs like myself, are being more frugal. I will admit that a few years ago I was living a little above my means due to easy credit and years of a flourishing economy and the mindset that foreclosure happened to other people, not anyone I knew. These days I find myself more aware of my spending, savings and retirement than ever before. I think it is from watching what happened to other people that's on the news daily that subconsciously affected me.

I gave up my new BMW 328 and am driving a 2002 Ford Explorer and plan to do so until it won't roll anymore. The Jet Ski stays though since that is long paid off.

I gave up my new BMW 328 and am driving a 2002 Ford Explorer and plan to do so until it won't roll anymore. The Jet Ski stays though since that is long paid off.

My custom painted KISS theme motorcycle stays.. it's paid off and if I sold it I couldnt get near what it's worth to me out of it. The saving grace is that it is an 03 Kawasaki Vulcan 1600 and not an overpriced although highly admired Harley Davidson.

My custom painted KISS theme motorcycle stays.. it's paid off and if I sold it I couldnt get near what it's worth to me out of it. The saving grace is that it is an 03 Kawasaki Vulcan 1600 and not an overpriced although highly admired Harley Davidson.

I was going to buy a Harley street Bob but I thought it was a bad idea around NYC for a variety of reasons. I bought a Seadoo RXT and it was the best thing I ever bought.

I fly around NY Harbor, Brooklyn Bridge, Coney Island, the Hudson River etc and don't have much if any restrictions and a much smaller chance of death all while speeding like a nut over the waterways.

NEW YORK (AFP) – General Motors reported Wednesday a nearly 25 percent slump in US sales in August compared to the same month a year earlier.

GM said sales plummeted to 185,176 vehicles from 246,479 last August, when US authorities launched a "cash-for-clunkers" incentive program to boost sales as the country struggled to emerge from a brutal recession.

"Last year's cash-for-clunkers program spiked industry sales in 2009, so results this August were not surprisingly a bit mixed," said Don Johnson, GM's vice-president for US sales operations.

Another aspect.. people who were thinking about buying a car, bought due to the outrageous deals being offered and the possible cash for clunkers program.

House market slumping.....could be part of the same thing.. people who could refinance already refinanced when interest rates hit 4.3% People who were thinking about buying bought to take advantage of the tax credit program..Add in the fact Paul McCartney would have trouble getting a loan from banks today with how tight they are with (our) their money.. So now there is a slump..

Back in 2009, President Obama’s “Cash for Clunkers” program was supposed to be a boon for the environment and the economy. During a limited time, consumers could trade in an old gas-guzzling used car for up to $4,500 cash back towards the purchase of a fuel-efficient new car. It seemed like a win for everyone: the environment, the gasping auto industry and cash-strapped consumers.

Though almost a million people poured into car dealerships eager to exchange their old jalopies for something shiny and new, recent reports indicate the entire program may have actually hurt the environment far more than it helped.

According to E Magazine, the “Clunkers” program, which is officially known as the Car Allowance Rebates System (CARS), produced tons of unnecessary waste while doing little to curb greenhouse gas emissions.

The program's first mistake seems to have been its focus on car shredding, instead of car recycling. With 690,000 vehicles traded in, that's a pretty big mistake.

According to the Automotive Recyclers Association (ARA), automobiles are almost completely recyclable, down to their engine oil and brake fluid. But many of the “Cash for Clunkers” cars were never sent to recycling facilities. The agency reports that the cars’ engines were instead destroyed by federal mandate, in order to prevent dealers from illicitly reselling the vehicles later.

The remaining parts of each car could then be put up for auction, but program guidelines also required that after 180 days, no matter how much of the car was left, the parts woud be sent to a junkyard and shredded.

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Shredding vehicles results in its own environmental nightmare. For each ton of metal produced by a shredding facility, roughly 500 pounds of “shredding residue” is also produced, which includes polyurethane foams, metal oxides, glass and dirt. All totaled, about 4.5 million tons of that residue is already produced on average every year. Where does it go? Right into a landfill.

E Magazine states recycling just the plastic and metal alone from the CARS scraps would have saved 24 million barrels of oil. While some of the “Clunkers” were truly old, many of the almost 700,000 cars were still in perfectly good condition. In fact, many that qualified for the program were relatively “young,” with fuel efficiencies that rivaled newer cars.

And though the point was to get less fuel efficient cars off the roads, with only 690,000 traded in, and over 250 million registered in the U.S., the difference in pollutant levels seems pretty negligible.

But all that vehicular destruction did more than create unnecessary waste for the environment. It also had some far-reaching economic effects.

According to a recent TriCities op-ed from Mike Smith of Ralph Smith Motors in Virginia, CARS created a dearth of used cars, artificially driving up prices. For those who needed an affordable car, but didn’t qualify for the program, this increase in price meant affordable transportation was well out of reach. It also meant used-car dealers, most of whom are independently owned, small-business owners, had little to no stock. According to Smith, 122 Virginia dealers chose not to renew their licenses after that year.

TakePart spoke to Daniel Gray, bestselling tech author and fuel-efficiency expert about the environmental impact of the auto industry. He says that the government is making strides. Chief among them is the announcement of CAFE MPG standards this year, new regulations introduced by the current administration that mandate a minimum fuel economy of 54.5 miles per gallon by 2025. That’s double the minimum requirement as of right now.

And in the interim, Gray encourages consumers to make informed decisions. “The biggest focus going forward should be to encourage folks to purchase the most fuel-efficient vehicle that fits their needs. We should also look into retrofitting older cars with the latest fuel-saving technology and encourage carbon-neutral, or possibly negative, renewable biofuels.”

I drive an '03 Mach 1 Mustang that I paid off in '05. It has 125K miles on it and I will drive it until it gives up the ghost or I can pay cash for a newer used vehicle. The unintended consequence of this economic hardship is that a lot of people who have secure good paying jobs like myself, are being more frugal. I will admit that a few years ago I was living a little above my means due to easy credit and years of a flourishing economy and the mindset that foreclosure happened to other people, not anyone I knew. These days I find myself more aware of my spending, savings and retirement than ever before. I think it is from watching what happened to other people that's on the news daily that subconsciously affected me.

Not all of the clunkers destroyed were indeed clunkers......some of the cars destroyed included an '85 Maserati, '89 GTA Trans Am, and an LT1 Corvette. Not awesomely great cars, but good enough that could have sold for a decent amount into the hands of collectors.

The government succeeded in that it did take higher fuel-consuming vehicles off the road permanently, but that is where the success ends.....more people in bigger debt due to new auto loans and according to the article, none of the scrap was recycled.

As far as gas mileage goes, vehicles nowadays are becoming even heavier due to the mandated safety standards. A new Camaro weighs well north of 4000 pounds......that's light truck/SUV territory! A lot of the Honda and Toyota 4-bangers of the 80s and 90s get better gas mileage than the $30,000+ hybrid shit that's clogging up dealerships. What a farce!